United States v. SDI Future Health, Inc.

We must decide whether corporate executives may challenge a police search of company premises not reserved for the executives’ exclusive use.

I

A

After a nearly two-year investigation spearheaded by the Internal Revenue Service (“IRS”) with the participation of four other federal and Nevada state agencies, investigators concluded that SDI Future Health, Inc. (“SDI”), a California corporation, had engaged in wide-ranging Medicare fraud. In addition, they believed that both SDI and Todd Stuart Kaplan, its president and part-owner, had committed extensive tax fraud. On January 28, 2002, based on the information obtained during the investigation, IRS Special Agent Julie Raftery applied for a warrant to search SDI’s premises.

The warrant relied on an affidavit sworn by Raftery, which contained information she had learned from three former employees and two business associates of SDI. The affidavit alleged that SDI, Kap-lan and Jack Brunk, also an officer and part-owner of SDI, participated in a conspiracy with physicians and cardiac diagnostic companies to defraud the Medicare program, the Federal Employees Health Benefit Program, and private healthcare insurance carriers by…